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Uber-Goldilocks
I guess we need to add a new term to the lexicon: "Uber Goldilocks."
You remember "Goldilocks," right? "She" was defined by growth that was just good enough to make it plausible to argue that the global economy wasn't vulnerable to a downturn, but not robust enough to chance stoking the kind of above-target inflation that might prompt central banks to roll back stimulus.
That macro regime -- which generally prevailed during the low vol bubble that peaked in late 2017 -- kept central banks in t
I can’t think of a better way to start off the new year than with a $2T tranche of fiscal support in Q1. The trade off for us would a burned down equities market and another recession. As others have so keenly pointed out, nothing will light a match under the Red Senate faster than deflated Vanguard 401(k) portfolios.
An outlier scenario is Biden is inaugurated with equities down 12-15% (just a WAG) in early January, COVID killing thousands each day, and employment a wreck. Maybe he also gets mass protests. No where to go but up. There’s the 100-day honeymoon. Vaccines come into play in Q2. Oil consumption increases. Jobs recovery. Thereafter, probabilities for decent times between Q3/Q4 and midterms could be pretty good…barring who knows what.